Low Priced vs. Premium Offers - What’s Working Now?
Episode 727: Show Notes
As you probably know by now, we’re obsessed with talking about pricing, so this episode is one of our new favorites! This conversation is more important than ever right now because of the current economic climate. There is no such thing as a one-size-fits all pricing model so today, we’re going to walk you through a couple of different scenarios that we have seen are working well for people.
We’ve sold everything from $29 products to $450,000 services and everything in between. So, rest assured, we know what we’re talking about when it comes to pricing. One of the consequences of the economic environment is that people start leaning away from education and towards done-for-you offers. Focusing on perfecting your pricing is your opportunity to make everything make sense again! Getting pricing right is a key factor we constantly stress with our clients.
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Bursting the Service Industry Bubble
For many years, many people working in the service industry didn’t have the expertise to justify their price points, but because of the bloatedness of the bubble the service industry found itself in, they could get away with it. But, as always, the bubble burst, and when online business owners realized they had been duped, it caused a severe lack of trust. Subsequently, this led to clients wanting to get to know their content creators on a much more personal level before diving into working with them. So, service providers are navigating a completely different environment these days in comparison to a few years ago!
Why We Prefer Premium to Low-Priced Offers
Premium means a lot of different things. It can mean luxury (and there’s definitely a market for that) but it doesn’t have to! Premium services can be divided into low-end, middle-ground, and high-end, and the prices associated with each level are very industry-dependent. But regardless of industry, when people start taking zeros off their offerings, it makes us question the integrity of their service. Wouldn’t you agree? That’s not to say that you can’t ever adjust your pricing downwards, but that decision shouldn’t ever be a gut reaction. If you’re thinking about reducing your prices, you need to really ask yourself, “Why?” For example, if your lead pool is going to double when you cut your price in half, that decision would make sense, but more often than not, it doesn’t work like that, which is why we advocate for premium pricing!
The Benefits of Pricing Tiers
We want you to ask yourself this: At the core of your service, what is the actual outcome you are providing and how can that outcome be achieved in different price point tiers with appropriate deliverables, each of which provides your ideal clients with your expertise? When deciding on your pricing, consider the amount of time it takes you to complete the task you are pricing for. This might sound obvious, but it’s important that you don’t forget it: if you have two offers and one takes you half the time, that’s the one that should cost less. Right now is the time when you should be experimenting with pricing, so don’t be afraid to take the leap!
Cut the Fluff!
Since the pandemic, people across the board have gained a lot of clarity around their values and priorities. So, the services-based businesses that are doing really well these days are the ones that have cut the fluff! When we say fluff, we mean the kinds of deliverables that don’t cost you anything because you can just do them once for every client. Get rid of those guides and videos that aren’t benefiting you or your clients and you’ll suddenly see a positive shift in your business.
Want Extra Support?
If you want even more help streamlining your business, creating your dream work week, and learning how to live life-first again, we’d love to have you learn more about the Incubator. We have thorough conversations packed full of value with each applicant to make sure this is the right next move for your business. Even if you decide not to join, if you’re approved you’ll have instant access to a private training all about how to streamline your work week without increasing your client capacity or sacrificing income.
Quote This
If your lead pool isn’t automatically going to double then you cutting your price in half isn’t getting you anywhere.
Highlights
Bursting the Service Industry Bubble. [0:13:09]
Why We Prefer Premium to Low-Priced Offers. [0:14:46]
The Benefits of Pricing Tiers. [0:19:52]
Cut the Fluff! [0:24:34]
Today’s Guest:
Abagail & Emylee
The Strategy Hour Podcast
The Strategy Hour Podcast is a twice weekly show hosted by Abagail Pumphrey and Emylee Williams, the founders of Boss Project. Join us for semi-ranty biz conversations for service providers looking to ethically grow their agency businesses. Episodes cover everything from lead generation to leadership mindset to team culture and beyond.
Key Topics:
Economic Climate, Done-For-You Services, Premium Pricing, Service Industry Bubble, Pricing Tiers, Industry Evolution
